While the company's response proves some of my assumptions or conclusions to be completely off-base -- especially my hunch about the unlikeliness of Wii U price drops -- on the whole their general strategy revolves around their long-time core strength and strategic fulcrum: The portable market. With the 2DS, Nintendo is redoubling their efforts around a cheap handheld systems backed by appealing software, aimed directly at kids... which, as I noted, has historically been Nintendo's winning play.

But first, let's talk about the Wii U price cut. While I suggested a price cut on the console could be potentially fatal to the company given the fact that it was already being sold at a loss (something Nintendo, historically speaking, diligently avoids), I didn't take into account the bizarre half-measure they've implemented. Yes, the Wii U deluxe set and bundle are being slashed from $349 to $299, but the basic set remains fixed at $299. So all Wii U systems are $299 now, even the one without bells or whistles.

The Wind Waker bundle will debut at the same price as the basic Wii U set, despite the fact that it contains 32GB of internal memory and digital versions of both Wind Waker and Hyrule Historia.

Unusual as this decision seems at first glance, it makes a lot of sense. Nintendo clearly intends to phase out the standard set and simply replace it with deluxe bundles. The reasoning behind this approach was recently laid out in a NeoGAF post that appeared a couple of days before Nintendo began to roll out info on the price cut to the press and managed to be so precisely on-point that I suspect it was based on some sort of insider info.

In short, though, the Wii U loses money for Nintendo with each unit it sells. However, the cost of the extras included with Wii U's deluxe bundles is, from a production and materials standpoint, essentially negligible. 32GB of flash memory costs almost nothing, and with the Wind Waker set marking a bundle strategy transition to preinstalled digital content (similar to existing 3DS bundles), even the modest extra cost of an included packaged game goes away; Nintendo wouldn't confirm that the standard Deluxe set's Nintendo Land pack-in would go digital as well, but it seems likely. Nintendo does spend money to develop games, but those are sunk costs; in terms of manufacturing expenses, the difference between the basic and deluxe Wii U models is incredibly slim. Dropping the bundle price but not the baseline console price allows Nintendo to offer a better deal for consumers without taking a severe hit to the bottom line. In bookkeeping terms, it's not so much that they're reducing the price of the Wii U hardware as throwing in all the extras for free.

But doesn't this make the basic Wii U package completely pointless? Absolutely, and while Nintendo wouldn't say it outright, it's obvious the white system has reached the end of its life. Nintendo's Scott Moffitt admitted that supplies of the basic set have sold through very well, with the implication that what's available at retail now is probably all that will be made. Going forward, it seems pretty likely Nintendo will push $299 Wii U bundles exclusively, which should make the system considerably more attractive. Much like the console itself, its price sits between those of the current- and next-generation competition.

However, Nintendo isn't implementing some sort of radical bonus for early Wii U adopters as they did with the 3DS ambassador program. Unsurprisingly, the Wii U strategy for now seems to be to stay the course; between a few high-profile titles (including Mario and Zelda) and the price cut, Nintendo is clearly content to weather the 2013 holiday season and the launch of two rivals systems before taking stock and making more radical adjustments to its plan, if necessary.

Besides the lack of 3D, the 2DS is essentially equal in features to the 3DS.

In the meantime, the company's R&D efforts have clearly focused on making Nintendo's handheld lineup as profitable as possible. The 2DS takes aim at cornering the portable market on value by taking the 3DS, making major (and yet, ultimately, superficial) cuts to its functionality, and greatly streamlining the physical design of the machine. At $129, it doesn't quite hit the all-important sub-$100 price point, but it should still be far more attractive to budget-conscious parents than the basic 3DS model ($169) or the 3DS XL ($199), which now costs the same as a PlayStation Vita. How well it can fare against the greater mobile market remains to be seen -- certainly the hardware seems like a great value compared to gaming tablets, but (anecdotally speaking) I've found Nintendo's refusal to race to the bottom for software pricing still gives many parents pause.

Curiously, the 2DS is even more of a tablet-style system than it appears at first glance, as it actually features a single large screen in its center, not two separate ones. As one of their cost-cutting design measures, Nintendo reduced the number of screens in the system from two to one, and the appearance of separate screens is merely simulated by the way the case masks out the extraneous portions. This means the entire screen is by necessity a touchscreen, with the upper screen protected by a layer of plastic that sits above it. While this makes no difference for the system's normal functions -- after all, neither the system's firmware or its software would recognize the hidden, inactive zones of the screen or the upper portion's touch capabilities, even if you exposed those portions -- I'm curious to see what hardware modders manage to do with the system.

What I find particularly interesting about the 2DS is that Nintendo has evidently developed it primarily with Western markets in mind. The system isn't on the horizon for the Japanese market, and while I'm sure it will eventually make it way into Nintendo's home territory, it won't happen for the foreseeable future. Frankly, it doesn't need to; according to Nintendo's most recent quarterly earnings report, the 3DS sold 640,000 units in Japan this spring versus 360,000 in the U.S. -- in other words, it performed nearly twice as well in a market roughly half the size. The 3DS continues to dominate Japan, meaning there's not much call for Nintendo to sweeten the pot. But the U.S. market continues to lag, and Nintendo knows the market well enough to know to pander to the fundamental frugality of Americans. Launching the 2DS alongside Pokémon X & Y Versions in particular is smart marketing.

The red trim is the only splash of color to be found on the 2DS, which is otherwise a very deep black. Of course, Europeans will be able to buy a white model with red accents, because the U.S. is forever doomed to get the least interesting versions of things.

Despite 2DS's target market being kids, I do think the device has potential to appeal to more hardcore fans as well. It's much more comfortable to hold, for starters. Also, it's a much less expensive means to acquire a foreign system for access to software blocked off by region-locking, and I don't doubt that whenever the system finally shows up in Japan we'll see plenty of U.S. and European gamers importing one for themselves.

Ultimately, though, Nintendo's next move isn't too far removed from what many of us -- myself included -- expected. A modest attempt to position Wii U as a better value without actually breaking the bank, and a redoubled attempt to wring every last penny out of the ever-profitable portable market: It's classic Nintendo, through and through. These tactics seem more like a temporary band-aid than a long-term solution, but at the very least they should help see the company through a potentially tempestuous holiday season and give them time to regroup.

Of course, now we have to wonder: What's Nintendo's next move after this? The cycle never ends.

Okay, so, does the deluxe set have anything the WindWaker bundle doesn't? I guess I'm asking if Nintendo Land comes with the WindWaker Wii U? Also, man that 2DS looks kludgy. I understand the cost-saving measure of one screen instead of two, but I am just not a fan as of yet. Could it be that Nintendo's tablet envy also fed in to the decision?

As a father of two, I'm interested in Nintendo's move to a more kid-friendly, lower price point handheld. My seven year old son inherited my old 3DS when I upgraded to a 3DS XL earlier this year. My daughter just turned four and is already showing interest in video games, however she is a bit rough on hinges!

I actually think this is a great idea as a kid oriented version of the system. Considering how many GBA's my younger siblings went through creating a much cheaper, and far more durable, version of the 3DS is a great idea! Just so long as Nintendo can market it properly to parents.

Expected/hoped for the Wii U price cut, this 2DS caught me by surprise however. It will be interesting to see how Nintendo markets future 2/3DS games going forward... can't help but wonder if there wasn't a different name they could have gone with.

For some reason I thought the Wii U (deluxe) was already $300, and that the basic bundle was $250. In other words, I didn't think that was worth it, and nothing has really changed in my mind.

I always knew the basic bundle would be phased out, though. They always are, and this was the first time Nintendo's launched with multiple SKUs.

As for the 2DS, it sounds like a marketing nightmare. If people were confused about the Wii U being a totally new system, I can't wait to hear all the fun anecdotes about the 2DS. As for its design, well... I could do without 3D (seriously, who uses 3D regularly?), but the lack of clamshell design really hurts it.

Standarizing costs in products is an old practice, but nevertheless clever. You simplify the catalog presented to retailers and let the customers see only a down price in the end product being offered.
Portable gaming bieng reinforced with the 2DS is also clever trying a nice grab in kids, tablet market and parents.

$129 for this piece of hardware after buying the $250 3DS, still feels shenanigans.

Now what Nintedo needs to start working on is an account system, and leave that hardware login in to Nintendo services in the past.

An entry level SKU that forgoes the 3D gimmick is a great idea. Inevitable, some would argue. It's obviously been timed with the Pokemon launch as a way to grab an even higher audience and maximise sales during what is going to be a distinct boost period for the platform.

But the design on this looks terrible.. and the back view gives off an ugly aesthetic. I don't think I'd want it in my pocket either, it has quite an awkward shape.

The shift to mono speaker is disappointing, even if it is still stereo with headphones on. Also, why does it have a 3D camera on the back still, surely that's redundant now for this model?Edited 2 times. Last edited August 2013 by Baleoce

@alexb dunno, the 3DS as it is has been selling like gangbusters the past two months, but the 3D screen is the only thing they could change to affect the price. This may just in fact be what it is on the surface.

@Thusian Thanks! I assumed as much. Funny Pavlovian response from me. When I thought I might be getting WindWaker HD+Nintendoland, I thought "instant purchase." For some reason, getting one or the other returns me to "meh." I know that makes zero sense.

@kingaelfric its not really hard to understand how thinking a system with two games bundled in is more attractive than one. It is 50 bucks cheaper than what I payed to get the system with Nintendo Land, but I am not a person who has had any trouble using it so I aint buthurt.

@touchofkiel Two points.
One, the Wii U basic bundle is dead. Target recalled them months ago, as did Best Buy and Gamestop, if memory serves.
Two, I always have the 3D on when I play my 3DS. I find it to be a great feature, and really pulls me into games in a way I wouldn't have predicted before I bought it. Taking it out seems like it would remove the AR card functionality, as well as Face Raiders. While not full games, those frugal parents Jeremy mentioned do like having something else in the box, instead of coughing up $30-$40 for a game.
I'm also surprised they didn't stick the second analog stick on here, too. While I'm mostly fine with not having it, those few games that benefit from it (Monster Hunter, Resident Evil, and Snake Eater) will now need a THIRD versiion of the Circle Pad Pro. And, looking at the 2DS, this one may truly have to be a Frankenstick.

@kingaelfric@Thusian Curiously, trading Nintendoland for Wind Waker HD and Hyrule Hystoria (even if digital versions) actually makes me more interested in that bundle. Of course, that’s my inner Zelda fanboy talking, and my finances are pretty much locked for the rest of the year anyway, so I’m on the fence about getting that bundle or not. If they were giving a physical version of Hyrule Hystoria, man I would probably try to extract money from rocks or something.

I just asked Santa / the Christkind for a 2DS, mainly on the strength of this article (plus I really want to be able to play Ocarina of Time). For the sake of the "just for kids / hardcore gamer" debate, I'm 29 and play a lot on PC, although I don't own a console other than my old second-gen DS.

Thanks for the helpful write-up!

Edit: In case anyone's trawling the web for purchasing advice and runs across this article, I did get one and it's brilliant. I can see how the relatively small screen might be an issue if you've been spoiled by a 3DS XL, but I've had no issues. It's comfortable for an adult with small hands to hold, everything works and there are some great games. L and R are easier to reach than on my old DS, but I don't know about newer models. I really like the analog stick.

I really do forget that I'm holding a weird-looking clunky thing while I'm playing it, as it's not heavy and I tend to focus on the screen. I haven't had any funny looks while playing on public transport yet. Battery life isn't bad at all, although I've yet to go on long trips with it.

My only criticism is of the "one system, one user" mentality that Nintendo has - I would love to be able to have two separate accounts. Some games don't even have two save slots. This would still be a problem no matter what 3DS / 2DS model you went for.Edited January 2014 by pertusaria

I've met a young boy and played on his 3DS. Every time you played a 3D game, whether it was the 3DS Camera or Animal Crossing, it asked you to confirm if you were playing in 2D and 3D. Quite annoying, really. Plus, who knows if the kid could somehow erase the parental controls? I did it once on my Wii when I was six.